Impact of Export on China BD Market to Wane in 2023
Snapshot: In the recent five years, the export volume of butadiene in China has trended up from previous years. It hit a historical high in 2021 while saw declines from 2022 to 2023. In 2023, it is envisaged that the butadiene export volume may be around 80kt, down 7% Y-O-Y. The export volume of butadiene slid Y-O-Y, as foreign demand recovery fell short of expectations. Foreign butadiene enjoyed obvious price advantages and its supply was high. Thus, Chinese-made butadiene resources didn’t have price advantages. On the whole, the impact of exports on China’s butadiene market may wane in 2023.
From 2019 to 2023, China’s butadiene export volume ramped up from previous years. Therein, in 2021, China’s butadiene export volume hit a historical high. It was mainly because the demand for butadiene in the U.S. was large, so Chinese-made butadiene resources were exported for arbitrage. Thereafter, the butadiene export volume pared down slightly. In 2023, the overall export market of butadiene performed on average. The export volume of butadiene in March and April remained high, but it remained stable in other periods, failing to greatly impact the butadiene price. In March and April 2023, China’s butadiene export volume advanced, due to the supply gap in Japan and South Korea caused by their units’ maintenance. Therefore, some Chinese-made butadiene resources were exported for arbitrage.
In the coming period, with some deep-sea cargoes replenished Asian market, China’s butadiene price may lose the advantage. So, the export volume is likely to drop later. In Q4, 2023, as several butadiene units in Southeast Asia are shut down unexpectedly, some of the Chinese-made butadiene resources are exported briefly. However, in 2023, the overall export volume of butadiene in China may hardly improve, so its impact on the price may be relatively limited.
From January to September 2023, in terms of the export destinations, China mainly exported butadiene to South Korea and China’s Taiwan. Therein, the export volume of South Korea accounted for around 55%, down 15% Y-O-Y. At present, Chinese-made butadiene resources are mainly exported to surrounding countries and regions, which may hardly change in the short run. Besides, the butadiene resource supply in most regions may be normal, so it is hard for the export destination to adjust.
From January to September 2023, as seen from the export registration place, the butadiene export volume in Guangdong, Shanghai and Zhejiang accounted for the largest proportion of 93%, followed by Liaoning and Zhejiang. At present, China’s butadiene exports only involve several producers and traders, which are distributed in coastal regions with excellent geographical location.
From 2029 to 2023, the export volume of butadiene in China first perked up and then whittled down. In 2023, it is estimated that China’s butadiene export volume may be around 80kt, down from 2022. The export volume of butadiene may account for less than 2% of the total domestic demand, down from 2022 as well. China’s butadiene market is still in a state of tight balance at present, so most resources are exported for arbitrage instead of exported at low prices. Therefore, the export volume may hardly be released. In 2023, the export volume may account for a small proportion of total demand, having a limited impact on China’s butadiene market. China’s butadiene export may underpin the market periodically.
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